Real Estate Agent and Broker Insurance in Michigan

E&O insurance covers legal defense costs when a real estate broker or agent is sued for negligence, such as a mistake in paperwork or failure to disclose known flooding risks at a property.

Also called professional liability insurance, this policy is required in some states for real estate professionals. However, Michigan does not require E&O coverage.

Even though it's not required by state law, real estate agencies, brokerages, and client contracts will likely require you to carry an E&O policy. It's a key part of risk management for Realtors and other real estate professionals during a property transaction.

General liability insurance protects your business from expenses associated with common mishaps, such as customer bodily injuries and accidental property damage.

Real estate agents and brokers might need this coverage to sign a commercial lease or qualify for a business loan. Clients and agencies might also ask for proof of insurance. For additional coverage on your general liability insurance and other policies, you can buy commercial umbrella insurance.

A general liability policy also helps protect against advertising injuries, such as libel, slander, and copyright infringement. So, if an employee at your real estate agency defames a competitor on social media, this policy would cover your legal costs if the other business sues.

A business owner’s policy bundles general liability insurance with commercial property insurance at a discount, and protects against common lawsuits, fires, and water damage. If you don't have an office, consider adding a business personal property (BPP) endorsement to your general liability policy instead.

To comply with Michigan's requirements, real estate businesses that have employees must provide workers’ compensation insurance. This policy covers medical bills from work-related injuries and occupational diseases, and provides disability benefits for injured Michigan workers.

Workers' comp is also recommended for independent contractors and sole proprietors, as personal health insurance can deny claims for injuries that are related to your job. Policies typically include employer's liability insurance, which shields employers from legal fees if an employee blames them for their injury.

Commercial auto insurance protects vehicles owned by your real estate agency, such as a van used to transport home staging decorations to clients' homes. It can cover legal bills and other costs resulting from an auto accident. Depending on your policy, it may also cover vehicle theft, weather damage, and vandalism.

Michigan requires auto liability insurance with limits of at least:

• $50,000 bodily injury liability per person
• $100,000 bodily injury liability per accident
• $10,000 for property damage in another state
• $250,000 personal injury protection (or less for individuals enrolled in Medicare or Medicaid)

For vehicles that your business uses but does not own, you'll need hired and non-owned auto insurance (HNOA). You can add it as an endorsement to your general liability policy or commercial auto policy. Keep in mind that if you drive your own car for work purposes beyond a commute, personal auto insurance won't provide financial protection.